Earnings management in response to the introduction of the Australian gold tax

Earnings from gold mining in Australia remained tax-exempt for almost seven decades until January 1, 1991. In the early 1980s, rapid economic prosperity induced by escalated gold prices brought the Australian gold-mining industry under intense political scrutiny. Using a variant of the modified Jones model, this paper provides evidence of significant downward earnings management by Australian gold-mining firms, which is consistent with their attempts to mitigate political costs during the period from June 1985 to May 1988. In contrast, test of earnings management over a similar period in a control sample of Canadian gold-mining firms produced insignificant results. Further, empirical results are robust to several sensitivity tests performed. During the period from June 1988 to December 1990, the Australian firms were found to have engaged in economic earnings management. This is consistent with the sample firms' incentive of maximizing economic earnings immediately prior to the introduction of income tax on gold mining. The findings of this study help to understand the impact of earnings management on the efficient resource allocation in an economy. They also contribute toward understanding the linkage between regulation of accounting for special purposes and general-purpose financial. reporting.

Assessing cost-effectiveness in mental health: vocational rehabilitation for schizophrenia and related conditions

Objective: Existing evidence suggests that vocational rehabilitation services, in particular individual placement and support (IPS), are effective in assisting people with schizophrenia and related conditions gain open employment. Despite this, such services are not available to all unemployed people with schizophrenia who wish to work. Existing evidence suggests that while IPS confers no clinical advantages over routine care, it does improve the proportion of people returning to employment. The objective of the current study is to investigate the net benefit of introducing IPS services into current mental health services in Australia. Method: The net benefit of IPS is assessed from a health sector perspective using cost-benefit analysis. A two-stage approach is taken to the assessment of benefit. The first stage involves a quantitative analysis of the net benefit, defined as the benefits of IPS (comprising transfer payments averted, income tax accrued and individual income earned) minus the costs. The second stage involves application of 'second-filter' criteria (including equity, strength of evidence, feasibility and acceptability to stakeholders) to results. The robustness of results is tested using the multivariate probabilistic sensitivity analysis. Results: The costs of IPS are $A10.3M (95% uncertainty interval $A7.4M-$A13.6M), the benefits are $A4.7M ($A3.1M-$A6.5M), resulting in a negative net benefit of $A5.6M ($A8.4M-$A3.4M). Conclusions: The current analysis suggests that IPS costs are greater than the monetary benefits. However, the evidence-base of the current analysis is weak. Structural conditions surrounding welfare payments in Australia create disincentives to full-time employment for people with disabilities.

The forgotten CGT events: Are asset revaluation reserve distributions by trustees of discretionary trusts capital gains?

It is the present practice that asset revaluation reserve distributions by trustees of discretionary trusts are not taxed in Australia. Are such distributions not meant to be taxed, or have relevant sections in the Income Tax Assessment Acts been overlooked? This article will review how trustees of discretionary trusts perform asset revaluation reserve distributions. It then challenges the current accepted view that they can be distributed tax-free to discretionary beneficiaries by analysing relevant CGT events, which the authors regard as forgotten events. It will be submitted that a discretionary beneficiary in receipt of an asset revaluation reserve distribution may have a capital gain which is required to be included in its assessable income. This liability for tax is regardless of the government's recent introduction of s 109XA to address the practice of asset revaluation reserve distributions bypassing the operation of Div 7A of the ITAA 1936 with such distributions.

The value of dividend imputation tax credits in Australia

A dividend imputation tax system provides shareholders with a credit (for corporate tax paid) that can be used to offset personal tax on dividend income. This paper shows how to infer the value of imputation tax credits from the prices of derivative securities that are unique to Australian retail markets. We also test whether a tax law amendment that was designed to prevent the trading of imputation credits affected their economic value. Before the amendment, tax credits were worth up to 50% of face value in large, high-yielding companies, but Subsequently it is difficult to detect any value at all. (C) 2003 Elsevier B.V. All rights reserved.

Using the tax system to collect fines

In this article we consider the possibility that fines could be collected through the tax and social welfare systems in the same way as higher education contributions and child support payments are currently administered. We argue that the existing system of fine collection and enforcement leads to high default rates and reduces the usefulness of fines as a sanction. We consider a range of models for the implementation of an income-related fine collection system, and discuss their possible implications for issues including judicial independence, the time taken to repay fines and aggregate fine revenue.

Personal Reflexive Instruments for Monitoring Engineering Development (PRIMED) Project

This was an early pre-Catalyst collaboration about developing reflexivity in student engineers. It was funded by (then) CUTSD.

Effect of self-monitoring and national culture on follower perceptions of personal charisma and charismatic message

In this paper, a theory of charismatic relationships is examined with reference to the follower's personal characteristics. It is argued that a leader's charismatic message and personal charisma occupy different roles for individuals who vary in national culture and level of self-monitoring. In an empirical test of the theory, 387 undergraduates of Chinese and Australian cultural backgrounds completed self-monitoring and charismatic leadership instruments. High self-monitors placed more importance on personal charisma than the charismatic message. Chinese participants relied more than the Australians on the charismatic message, although this preference depended on self-monitoring orientation. These results indicate the influence of both individual-and cultural-level variables on leader-member relationships, and the need to consider these effects in future developments of a theory of charismatic leadership.

Insufficiently active Australian college students: Perceived personal, social, and environmental influences

Background. A sustainable pattern of participation in physical activity is important in the maintenance of health and prevention of disease, College students are in transition from an active youth to a more sedentary adult behavior pattern. Methods. We assessed self-reported physical activity and other characteristics in a sample of 2,729 male and female students (median age was 20 years) recruited from representative courses and year levels at four Australian College campuses. They were categorized as sufficiently or insufficiently active, using estimates of energy expenditure (kcal/week) derived from self-reported physical activity, Personal factors (self-efficacy, job status, enjoyment), social factors (social support from family/friends), and environmental factors (awareness of facilities, gym membership) were also assessed. Results. Forty-seven percent of females and 32% of males were insufficiently active. For females, the significant independent predictors of being insufficiently active were lower social support from family and friends, lower enjoyment of activity, and not working. For males, predictors were lower social support from family and friends, lower enjoyment of activity, and being older. Conclusions. Factors associated with physical activity participation (particularly social support from family and friends) can inform physical activity strategies directed at young adults in the college setting. (C) 1999 American Health Foundation and Academic Press.

Property crime and income generation by heroin users

This paper provides a detailed analysis of patterns of income generation among 202 active heroin users in South West Sydney. We explore both sources of income and the relative contribution of different types of income generating activities, including drug sales and related activities, property crime, prostitution, legitimate income and avoided expenditures. Despite claims that heroin use leads inevitably to property crime, drug market activities accounted for a greater proportion of drug user income in this sample. Results indicate that law enforcement crackdowns that reduce opportunities for generating income from the drug market may increase property crime by heroin users.

The personal constructs of coping with chronic low back pain: is coping a necessary evil?

The construct of coping is explored in this paper utilising repertory grid technique with a small group of non-patients with chronic pain. Nineteen volunteers with low back pain completed a repertory grid with eight given elements signifying various self and illness-related roles. Two constructs were given and the remainder elicited using the triad method. The 19 participants rated themselves as being in less pain than those they typified as ill or disabled and considered themselves to be coping with their pain. The constructs elicited emphasised authenticity, the limitations of being a coper, mastery, active stoicism, cheerfulness, acceptance and maintaining acceptable social interactions and appearances. Copers were considered to not be in constant pain. Self, ideal-self and social-self constructs were closely related, The participants rated themselves more like copers than ill, pain-suffering, invalid or hypochondriacal persons. Being a coper, however, was less desirable than being pain free, In essence, these volunteers with low back pain see coping as a necessary evil. This ambivalent and ambiguous construing of coping needs to be further explored in community and patient groups if we are to improve the collaboration between patients and therapists in achieving good pain management. (C) 1997 International Association for the Study of Pain. Published by Elsevier Science B.V.